Billionaire David Tepper’s Top 10 Stock Picks Heading into 2025

5. Meta Platforms, Inc. (NASDAQ:META)

Appaloosa Management LP’s Stake Value: $357.78 Million

Number of Hedge Fund Holders: 235

Meta Platforms, Inc. (NASDAQ:META) is a communication services company that offers products that enable people to connect and share with friends. Best known for its Facebook app, it also owns Instagram, Messenger, and WhatsApp. It’s one of the best-performing stocks in the Appaloosa Management portfolio, going by an 80.13% year-to-date gain.

Meta Platforms, Inc. (NASDAQ:META) controls about 21% market share in the US digital advertising sector. Likewise, it generates about 98% of its revenue from digital advertising on Facebook and Instagram. The remainder comes from WhatsApp Business Platform and the Reality Labs division. Its edge in digital advertising stems from the average user spending at least 30 minutes on Facebook, WhatsApp, and Instagram.

In addition, Meta Platforms, Inc. (NASDAQ:META) is investing in artificial intelligence to enhance user experience in its apps. The investments are already paying off, as the company’s ad impression was up by 7% in the third quarter. The average pricing per ad was up 11% in the quarter, allowing the company to generate $40.59 billion in revenue. Meta’s days of robust growth are far from over, as the global digital ad market is expected to grow at an average annual rate of 15.5% through the end of this decade.

Polen Capital mentioned Meta Platforms, Inc. (NASDAQ:META) in its Q2 2024 investor letter. Here is what the fund said:

“Meta Platforms delivered robust results in the period, with revenue growth accelerating in the first quarter. However, revenue comparisons for Meta will become more difficult from here, and its guidance for 2Q revenue fell below market expectations. After the company’s “year of efficiency,” where it cut costs in its core business, management is now indicating another ramp-up in GenAI and metaverse spending, spurring concerns about future profit margins. Metaverse spending, by our calculations, is now over $20 billion per year with little to no expected return on the foreseeable horizon.”